We’ve got another high powered economic event for the Greenback to close out the week, putting this potential range breakout on USD/JPY near the top of the watchlist.
Intermarket Snapshot
| Equity Markets | Bond Yields | Commodities & Crypto |
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US 10-yr 1.693% -0.103 Bund 10-YR -0.419% -0.062 UK 10-YR: 0.612% -0.076 JPN 10-YR: -0.132% -0.012 |
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Fresh Market Headlines & Economic Data:
- 2019 October U.S. Job Cuts Report: Announced Cuts Edge Up 21% in October
- The PCE price index decreased less than 0.1 percent. Excluding food and energy, the PCE price index increased less than 0.1 percent
- US consumer spending rises moderately
- Chicago PMI weakens further in October to 43.2 from 47.1 previous
- Trump says U.S., China to announce new venue to ink trade deal soon
- China’s factory activity shrinks at sharper pace, services weaken as risks grow
- Canadian GDP edged up 0.1% in August, following no change in July
- Canada IPPI ticked down 0.1%, following a 0.2% increase in August; RMPI was unchanged in September, compared with August
- Oil prices dip as U.S. crude stocks and weak Chinese data weigh
- German retail sales rise less than expected in September
- Euro area annual inflation down to 0.7%
- Euro area unemployment at 7.5%; EU28 at 6.3%
-
GDP up by 0.2% in the euro area and by 0.3% in
the EU28 - Australia private sector credit in Australia rose by 0.2% m/m in September 2019
- Australia building approvals was up 7.6% in September m/m; -19.0% y/y
- New Zealand business confidence jumped 12 points to -42% in the October ANZ Business Outlook
- Japan Housing Starts decreased by -4.9% in September vs. a -7.1% decrease in August
- Japan’s Consumer Confidence Index (seasonally adjusted) was up 0.6 points in October 2019 to 36.2
- Japan’s September industrial output rises 1.4% on month
Upcoming Potential Catalysts on the Forex Calendar:
- Australia Manufacturing index at 9:30 pm GMT
- Japan Unemployment rate at 11:30 pm GMT
- Australia PPI at 12:30 am GMT (Nov. 1)
- Japan Manufacturing PMI at 12:30 am GMT (Nov. 1)
- China Manufacturing PMI at 1:45 am GMT (Nov. 1)
- Swiss CPI, Retail sales at 7:30 am GMT (Nov. 1)
- Swiss Manufacturing PMI at 8:30 am GMT (Nov. 1)
- U.K. Manufacturing PMI 9:30 am GMT (Nov. 1)
- U.S. Non-Farm Payrolls at 12:30 pm GMT (Nov. 1)
- Canada Manufacturing PMI at 2:00 pm GMT (Nov. 1)
- U.S. ISM Manufacturing PMI at 2:00 pm GMT (Nov. 1)
What to Watch: USD/JPY
The monthly U.S. employment update is back and likely to shake up an already shaken U.S. dollar after yesterday’s monetary policy statement from the Federal Reserve (Fed Cuts Rates a Quarter Point, Powell Says Policy in Good Place). With expectations that we’ll see some softening of the job sector based on the rising job cuts data and some weakness in yesterday’s ADP Private payrolls report (September total for jobs added was revised down from an initial 135,000 to 93,000), it’s possible could continue its intraweek trend lower if the weakness is confirmed by the government data.
That brings us to USD/JPY, which has been in a holding pattern for a lot of October, ranging between roughly 108.20 – 109.00. Yesterday’s FOMC statement quickly brought the pair down from the top of the range to the bottom, and now it’s possible a breakdown of the bottom of the range could be in the works.
For the bears, the momentum is in your favor and if we do see a weak U.S jobs update and bearish dollar reaction then it might be time to take action. A break below and retest of the 108.00 – 108.20 area is the technical pattern to watch out for, and given the longer-term trend lower, this could draw in technical traders from all time frames, as well as fundie players to spark a longer-term move.
For the USD bulls out there, a hot U.S. jobs number will likely draw in buyers, not only fresh ones but will likely cause profit-taking from yesterday’s drop. A buy from the 108.00 area is the ideal entry point and with the daily ATR at around 50 pips, the potential for a strong short-term return-on-risk is good if using that ATR as a stop guide while targeting the top of the October range in USD/JPY.
